It is always suggested planning your estate as early as possible and it becomes more important if you have children. You might have planned everything carefully be it distribution of your property, guardianship for your minor children, insurance policies, etc. but you haven’t thought of divorce as you never know what life brings in for you. If you are getting divorced due to any reason you will be facing emotional and financial turbulence. In such a situation you will have to work out so many things, make several decisions and in between all those stuff, you forget about estate planning. However, after a divorce, it is essential to update your estate plan as now your priorities, beneficiaries, and goals might have changed.
If you have planned your estate while you were married, there is the possibility that you might have left your belongings to your partner, and added him/her as beneficiary, then he/she may take all the advantages and left you with nothing. Hence, it is advised to review and update your estate planning documents according to your new wishes.
Estate Planning for Separated Spouse-
Below listed are some steps to be taken by you to be ensured that your estate plan unfolds your present life and priorities:
1. Replace your old will with a new one: The very first step after or during divorce is to cancel your old will and make a fresh one. In case you don’t have a will then you can start making one now. A will is a legal document by which you can leave your property for your chosen ones, assign an executor to let the proceedings happen smoothly and even designate a custodian for your young children. In case you already have a will, then your choices might have affected due to divorce. Hence, you must make a new will with designating new beneficiaries according to your priorities of current life. Also, the executor earlier appointed might be your spouse, hence, you must assign a new executor of your choice.
As far as designating a guardian is concerned, if one of you expires then the surviving parent will get the guardianship. However, if you think that your ex-partner is not a good parent or have severe substance abuse issues then you can appoint a close friend or relative as a custodian for your young children along with specifying the reason behind doing so in your will. Also, you can set up a trust and choose an administrator to help with their education and survival funds.
2. Beneficiary designation update: A will covers all of your assets however, some assets are such that they pass outside of a will to the designated beneficiaries named on the concerned documents provided by the company such as life insurance policies, retirement accounts, pay-on-death bank accounts. After getting a divorce, you much review such documents of the aforementioned accounts and ensure that the beneficiaries are according to your present wishes. If not, then you must update the beneficiary designation by submitting new documents.
3. Fresh power of attorney: Power of attorney is the document that gives authorization to your chosen people to take healthcare and financial decisions for you on your behalf when you are incapable of doing so on your own due to illness or an accident, hence, being so important, they must be updated after getting a divorce. It comprises healthcare power of attorney and financial power of attorney. If you already have both these attorney papers and have your spouse authorized on them, then you need to revoke these documents and make a fresh one authorizing someone from your present life who is your trustworthy.
4. Decide assets for your spouse: You can’t disinherit your spouse completely in most of the states and if you do so then your spouse has the right to contest the will and receive a certain share of your assets. You can leave your spouse only with what he/she is entitled to receive under your state’s law. However, if you want your spouse to fight for their share then you can disinherit them and then let them contest in the state court. At the end, it is your choice.
5. Time for a Prenuptial Agreement: It’s quite surprising that people soon get remarried after their divorce is finalized. However, if you are thinking of remarriage then you must ensure that you have a prenuptial agreement in place beforehand.
After the finalization of the divorce and proper division of the property, you can make your own estate planning decisions. After reviewing and updating your estate plan regarding previous marriage well in time, you can be relaxed with peace in mind. Hence, remove your “ex” from those old estate planning documents, take charge and move on in your life.